Tax implications of moving back to Uk

[DBB1952]

My partner and I like living in OZ.

 

I was born in UK and my partner is a North Queensland girl.

 

In May next year I will retire from the OZ labour force and for family reasons we plan to spend some time at least each year in the UK.

 

So we are considering relocating either wholly or partially back to the UK and are trying to sort out what the tax implications will be, particularly in relation to tax treatment in the UK of OZ superannuation.

 

I think we understand the tax residency rules but are suspicious that the OZ super which is tax free in OZ will be liable for tax at 20% in the UK.

 

Does anyone have actual experience of this?

 

Many thanks

 

David B and Judi F

[Marisawright]

All pensions are regarded as ordinary income in the UK and taxed accordingly - so yes, if you take your super as a pension and if your ordinary income is taxed at 20%, that's what you'll pay. You do have a tax-free threshold of course.

 

If you are able to take your super as a lump sum before you go and put it in an Australian bank account, you can then transfer it to the UK with no tax implications. Of course, you'll then pay tax on any interest earned in the UK! If you take it as a lump sum after you've become resident in the UK, it will be taxable.

 

The other snag, in case you're not aware, is that if you leave Australia before you're eligible for the Australian government pension, you won't be able to claim it. If you've got a lot of assets and super you may not qualify for even a part pension for some years, but it is something that exercises our minds - what happens if we get to our 80's and find we're running short of funds? If we can't get the Aussie pension then we've got no safety net.